Seven Economic Reasons For a US Citizen to Retire to Panama

By Lamar Ross

So, why should YOU consider retiring to Panama? There are probably as many reasons as there are people considering it, but below I give you seven of my personal economic reasons.

Panama is not new to the top ranking of retirement destinations. It has continually ranked in the top ten for a decade or longer. International Living magazine, the American Association of Retired People, Modern Maturity magazine, Retire and Invest Overseas, and a multitude of other newsletters and publications have praised the benefits of retiring to Panama. After doing much research on retirement destinations, I personally chose Panama as my country of choice. I have listed my lifestyle reasons for choosing Panama in another article so here I only consider the economic ones.

Number 1: The Panamanian pensionado (retiree) visa is second to none. Since its inception in June of 1987, the Panama pensionado visa has continued to improve. It is basically a lifetime visa for foreign retired persons and unlike the retiree program for native Panamanians, the minimum age can go as low as nineteen years of age (or just over the age for for classification as a dependent). The amount of monthly income required to obtain the visa recently increased but so have the benefits. Simply by demonstrating your pensionado status, you will receive discounts ranging from 10% up to 50% off everything from doctor’s visits to movie tickets. Even airfare within the country carries a 25% discount with COPA airlines.

Number 2: Panama uses the American dollar. The official currency is the balboa, but the bills are all in the form of U.S. dollars. Paper money is both called dolar and balboa. Likewise, U.S. pennies, nickels, dimes, and quarters are used for change but balboa denominated coins(in the same size and shape of the U.S. coins) are also used. There is therefore no problem with exchange rates or currency exchange.

Number 3: Panama is a major international banking center. Both the retiree and the active businessman can readily make international banking transactions since most of the major world banks are represented here. Panama is also considered high on the list of international destinations for banking privacy.

Number 4: There is no tax on foreign income. Panama does not tax income earned elsewhere and brought into the country. Coupled with the benefits of importing a car and personal goods free of import duty through the pensionado program, this tax status is of tremendous benefit to the retiree. In the case of U.S. retirees, you are still responsible for U.S. taxes the same as if you were in the States and still need to file an annual return. The U.S. allows certain deductions for foreign earned income, but that is another topic for another article.

Number 5: Foreigners can buy and own property. This is an advantage that many retiree destinations do not offer. Whether looking for a growth investment over time or simply a home during your retirement years, Panama real estate offers retirees geographical variety and a large range of purchase prices. Whether you want property in the city, in the mountains, or beachfront property, it is all available and you have the right to purchase real estate as a foreigner.

Number 6: The cost of living is relatively low. The cost of living in Panama is not as low as in some other destinations, but neither do the cheaper destinations offer the additional benefits than living in Panama does. For U.S. and European retirees, the cost of living is generally well below that in their respective native countries.

Number 7: The country’s infrastructure is continually being upgraded. A major factor in the future benefits of a country to the retiree is the status of the country’s infrastructure. Several major projects are currently underway in Panama that will aid both the native and foreign inhabitants. The Panama Canal is being expanded with a third set of locks that will accommodate the world’s largest ships. New roads are going in throughout the country. Several regional airports are in the early planning stages, and there is even talk of putting in a subway in the metropolitan Panama City area.

As I said previously, there are probably as many reasons for a prospective retiree to choose a particular retirement destination as there are people. Those economic reasons I have listed are by no means all, but are the major ones that I consider significant for me.

Dr. Lamar Ross has a special interest in training individuals for expatriate living and providing information on unique travel destinations. He is an author, educator, photographer, internet entrepreneur, and international traveler. He has lived in the United States, Mexico, Puerto Rico, and India and has traveled extensively in 29 different countries. He speaks both English and Spanish fluently and has a basic ability in several other languages. For more information on expatriate living, check out the blog Expatriate Traveler Notes.

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